Marketing May Be Your Supply Chain's Weak Link

If you ever thought the marketing department had a blind spot when it comes to supply chain management, turns out you're right. A new study by the Chief Marketing Officer (CMO) Council reveals significant blind spots in the go-to-market process as marketers focus on strategy, creative development and campaign execution to the detriment of effective demand chain provisioning. The latter includes the efficient and timely delivery of marketing and merchandising materials to dealer, agent, franchise, retail and brand office locations, as well as the processing of customer requests for sales literature and samples through web, call center and email channels.

According to the report, entitled Competitive Gain in the Demand Chain, many marketing executives admit they have never assessed demand chain performance, nor given it high priority within the marketing operational mix. This may be contributing to the belief, expressed by 80% of respondents, that their organizations are not efficient or effective enough in provisioning all of the demand chain. A surprising 20% of more than 250 marketers audited by the CMO Council in the past three months admit their demand chain is under-performing or in need of improvement.

The study, sponsored by Archway Marketing Services Inc., is part of ongoing research by the CMO Council's Marketing Supply Chain Institute into ways to improve frontline performance through better go-to-market process innovation, supply chain optimization, and marketing ecosystem management.

Marketers agree that demand chain provisioning is critical to business competitiveness and performance (38% of respondents), while an additional 31% believe it is important to sustaining sales and channel operations. Yet, only 25% of respondents are ensuring sales support materials and resources are delivered on-demand, which would improve sell-through and customer conversion. Only 15% are taking steps to audit and assess marketing supply chain effectiveness, indicating that there is little to no visibility into the demand chain provisioning process to truly gauge content, material or operational impact and performance.

"Marketing tends to be preoccupied with staying on track with individual tactical executions or traditional marketing fundamentals like lead generation, campaign execution and content or creative development," says Donovan Neale-May, executive director of the CMO Council. "However, today's demand chain requires a new mix of digital, direct, and retail distribution, fulfillment, measurement and tracking capabilities to maximize customer contact, conversion and interaction."

While 56% of marketers are focused on campaign design, development and execution, only 16% are looking to production, warehousing, inventory management or delivery as critical elements in an effective demand chain. In addition, just two% are looking to optimize the actual delivery, fulfillment or distribution of their critical marketing materials.

One area that potentially holds an immediate opportunity for improvement and value creation is specific to vendor selection or management. Nearly half of respondents view demand chain procurement and fulfillment as a compilation of individual vendors, asking each vendor to bid on individual elements of the demand chain. Only 7% of marketers view the demand chain as an area for consolidation and rationalization to gain more control and efficiency. As nearly 60% of respondents plan on introducing a more disciplined approach to marketing execution systems, vendor visibility is likely an ideal place to begin demand chain transformation.

"Overlooking the final 'field and prospect delivery' elements of the demand chain can be costly, and operationally disruptive," says Mike Moroz, president of Archway Marketing Services. "Far too often we see amazingly planned and executed creative fall desperately short due to a poor integration between these two segments of the demand chain -- the creative strategy and customer engagement through fulfillment."

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